Saturday, July 31, 2010

The Latest Surprise In ObamaCare Bill: Your Taxable Income Will Be Redefined Higher

Starting in 2011, next year-the W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are provided. It doesn’t matter if you’re retired. Your gross income WILL go up by the amount of insurance your employer paid for. So you’ll be required to pay taxes on a larger sum of money that you actually received. Take the tax form you just finished for 2009 and see what $15,000.00 or $20,000.00 additional gross income does to your tax debt. That’s what you’ll pay next year. For many it puts you into a much higher bracket.

You can find the detais on this clause by going to http://www.thomas.gov// , enter “HR 3590.” Or you can also search the Patient Protection and Affordable Care bill for Title IX Revenue Provisions-Subtitle A: Revenue Offset “(Sec. 9002) that requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer-sponsored group health coverage that is excludable from the employee’s gross income (excluding the value of contributions to flexible spending arrangements).

16 comments:

1.) Raise more tax revenue2.) Incentivize businesses to now give up healthcare plans, with the idea being that people won't be able to afford insurance otherwise and then they'll be receptive to/clamor for a public health insurance program.

Now, what's more likely is that if businesses give them up and individual consumers have to buy their own health insurance, they'll be more selective and the industry will become more competitive and lower priced as a result.

I would say that you're thoughts are in direct contract with the CBO :)

"This CBO estimate of the cost of premium assistance assumes that tens of millions of otherwise eligible households will not be eligible for this new entitlement because their employers will continue to offer them qualified coverage at their place of work. Under ObamaCare, if a low income household is offered qualified coverage by their employer, they are automatically ineligible for additional federal premium assistance (this is the so-called “firewall” rule aimed at creating a barrier against mass migration out of employer-sponsored insurance)."

As much as I hate this piece of legislation, Red State is not correct. While it is true that the amounts will be included on your W-2, the IRC section that is referred to by sec 9002 is IRC sec 6051(a) which simply covers what information needs to be reported to the IRS for employee wages. This provision, sec 9002, simply adds another box.

My guess is that this information will be used as a sort of red flag by the IRS later on when the 40% excise tax kicks in.

I read the links, anon @904pm, and you are somewhat correct. Only about 10% of taxpayers will be responsible for that excise tax, but everyone will pay in higher premiums because of it, since that 40% tax will be distributed throughout. How long until they change the rules, and include 50% of taxpayers, and increase the tax?

The substance of the post is misleading, but the core of the post is true.

Bill, we shouldn't stop filing however resistant or opposed we are to taxes. I just hope that the administration would provide a fairer equilibrium in taxing that doesn't pose much a burden on its citizens.

Tax liens are distressing and can also truly wreck your credit rating. Even though, taking a loss repeatedly out of your pay could be looked at as worse by most people. To best understand these debt collection practices, stop by the site that describes exactly how every method is placed.

Stupid, a small price to pay for getting per-existing conditions covered, forcing insurance companies to cover and not deny, letting kids stay on the parents policy, covering more people there by lowering cost in the future.

A small price to pay for forcing insurance companies to cover pre-existing conditions, letting kids stay on parents policy's longer, covering more people who are not getting preventive care (we pay for that later in emergency room care and treatment for disease that could have been avoided or delayed)

The first FAQ even states that this is not taxable income. It is to report on average what people pay so you will be able to compare in the future. It is to give time for employers to change over how they report it.